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I'm planning to move to California from the Midwest. I will be putting my house on the market in the next 8 weeks or so. I am flying to the west coast to check out homes/neighborhoods, etc. Probably not ready to make offers until my house actually sells, but who knows?
I've had some realtors tell me they won't show me a house without a pre-approval letter. Is that right??
I just want to get an idea of what a certain price will get me out there in terms of a house. Plus check out the neighborhoods!
When should a person think about getting a pre-approval letter? And should it be from the mortgage lender in the city you are moving to? How to find the best one?
I'm planning to move to California from the Midwest. I will be putting my house on the market in the next 8 weeks or so. I am flying to the west coast to check out homes/neighborhoods, etc. Probably not ready to make offers until my house actually sells, but who knows?
I've had some realtors tell me they won't show me a house without a pre-approval letter. Is that right??
I just want to get an idea of what a certain price will get me out there in terms of a house. Plus check out the neighborhoods!
When should a person think about getting a pre-approval letter? And should it be from the mortgage lender in the city you are moving to? How to find the best one?
The real estate agent wants to be sure he's showing you houses you might actually be able to buy, and not just chauffering you around to a bunch of nice homes so you can get decorating ideas. I'd suggest sitting down with whomever he recommends, answer a few basic questions, maybe provide some basic verification of at least salary, and get a pre-approval letter. At this stage, it will probably be a pre approval contingent upon the closing of your current house, but that should be sufficient to be looking for property, even if some buyers won't accept is when the time to make an offer gets here. It really shouldn't be any more complicated than that. It might also be a benefit to you, as you'll at least get started talking to people in the lending field, getting familiar with some loan programs & costs. One thing I will advise is that you don't pay a dime for your pre-approval. At least here in NJ, you shouldn't have to lay out any money right now, and aren't committing to use a particular lender.
Talking to lenders will really help in just letting you understand the process and what programs are available to you.
If an approval expires, it is very easy to get an updated one. And he is correct, you should have no up front out of pocket expense for a pre approval.
Hope that helps!
Last edited by jeffselan; 02-15-2008 at 08:59 AM..
Reason: spelling
I just went thro this process in Florida... Actually there is a difference between pre-APPROVAL and pre-QUALIFICATION
pre-qualification is what you get when you verbally state your income details, debt details, etc and get a 'pre-qualification' letter. Most sellers (or realtors) dont give much value to pre-qualification because you can bluff your way to get one.. .
pre-approval, on the other hand, is the one you get from a bank by giving your SSN, income details, etc. This is just like getting a mortgage, but without a rate lock. You dont have to pay a 'fee' either.
You may want to get pre-approved if you are serious. But, you gotta be careful.. since this is a 'pull' against your credit report. If you are going to apply and get a mortgage within a month or so, pulling a credit doesnt matter. This is because, if you apply for mortgage with different lenders within a 30 day period (some say it is 14 days), it is counted as one 'pull'.
I got 'pre approved' and had a really strong case to negotiate prices with sellers, or their agents.
Just ask the bank to pre-approve you for the max possible amount that you can qualify... and play hardball with sellers. It is a buyer's market and you can play all you want with negotiating prices, like a bull in a china shop! (If you have excellent credit, that is)
You may want to get pre-approved if you are serious. But, you gotta be careful.. since this is a 'pull' against your credit report. If you are going to apply and get a mortgage within a month or so, pulling a credit doesnt matter. This is because, if you apply for mortgage with different lenders within a 30 day period (some say it is 14 days), it is counted as one 'pull'.
I queried my mortgage consultant on this same issue, and she stated they were doing a "soft hit", which supposedly didn't count against my credit. She already did a couple re-fi's for me before I sold my last house, so maybe she didn't have to dig as deep for the new approval.
And yes - the pre-approval shows sellers that you're serious. There's nothing more annoying to a seller than re-arranging their lives to accommodate showings for tire-kickers. (You'll see...)
Talking to lenders will really help in just letting you understand the process and what programs are available to you.
If an approval expires, it is very easy to get an updated one. And he is correct, you should have no up front out of pocket expense for a pre approval.
Hope that helps!
when a real estate agent ask for a pre-approval it no different then a doctor checking to see if you have health insurance or money to pay him.
Last edited by judithexit; 02-15-2008 at 09:26 PM..
Reason: oops typo
If this is a job relocation that is causing the move, they should have a program with a realtor that should be willing to work with you with or without a pre-approval.
If the move is strictly personal, then you'll probably have to comply with whatever they want in regards to proving your ability to finance a house.
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I agree with Bill.
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